Goldman Sachs says sell HDFC Bank, stock falls 2%

HDFC Bank, the second largest private sector in India, dropped nearly 2 percent on Friday after the foreign research house Goldman Sachs recommended a sell rating on the stock.

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Goldman Sachs says sell HDFC Bank, stock falls 2%

HDFC Bank, the second largest private sector in India, dropped nearly 2 percent on Friday after the foreign research house Goldman Sachs recommended a sell rating on the stock.

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HDFC Bank , the second largest private sector in India, dropped nearly 2 percent on Friday after the foreign research house Goldman Sachs recommended a sell rating on the stock.

The target price for the stock is at Rs 560, according to the report.

"Money laundering allegations if true could lead to slower growth as RBI may direct private sector banks to focus on improving risk management rather than expanding," Goldman Sachs reasoned.

On Thursday, CobraPost's pan-India undercover investigation accused the lender along with two other banks, namely ICICI Bank and Axis Bank , of running a vast, nation-wide money laundering racket. The stock lost 2% as soon as the news became public but recovered all its losses after the bank clarified on money laundering charges.

Money laundering is way of converting black money into white through any unscrupulous bank transaction.

On July 31, 2015, HDFC Bank closed at Rs 1111.20, up Rs 3.35, or 0.30 percent. The 52-week high of the share was Rs 1127.90 and the 52-week low was Rs 792.00.

The company's trailing 12-month (TTM) EPS was at Rs 42.48 per share as per the quarter ended June 2015. The stock's price-to-earnings (P/E) ratio was 26.16. The latest book value of the company is Rs 246.68 per share. At current value, the price-to-book value of the company is 4.50.